University - Year 2

Accounting

3,750,00
a.) Credit sales (75% x 5,000,000) 0
Doubtful accounts (2% x 3,750,000) 75,000

Doubtful accounts 75,000

Allowance for doubtful accounts 75,000

b.) Doubtful accounts (1% x 5,000,000) 50,000

Allowance for doubtful accounts 50,000

c.) Required allowance 80,000

Less: Credit balance of allowance -20,000
Doubtful accounts expense 60,000

Doubtful accounts 60,000

Allowance for doubtful accounts 60,000

d.) Required allowance (10% x 500,000) 50,000

Less: Credit balance of allowance -20,000
Doubtful accounts expense 30,000

Doubtful accounts 30,000

Allowance for doubtful accounts 30,000